Yesterday’s news that Visa’s Scam Disruption Practice has identified over $1 billion in fraud attempts since its inception just a year ago is good news indeed. In an age of instant payments, scams are mounting fast, with scammers targeting the elderly and vulnerable in particular. In the UK, so-called “Automated Push Payment” or APP scams hit almost half a billion pounds of losses in 2024, before falling back in the face of measures such as those being implemented by Visa.
Consumers and businesses want faster, smoother and more convenient payments, and over the next five years there’s no doubt we’ll see instant payment soar in popularity. According to Straits Research, instant payments between businesses (a far larger segment than consumers) will exceed $30 billion by 2030. How much of that turnover will be lost to fraud remains to be seen, although with the rise of “Crime as a Service” and growing use of AI by the criminal fraternity, it’s unlikely that attempted fraud will decrease any time soon and will continue to affect both consumers and businesses.
Visa’s announcement should also be seen in the context of growing friction for consumers and businesses caused by increasingly onerous verification methodologies. We are all familiar with the biometrics, passcodes, memorable information and usernames we’re expected to remember every time we need to buy things online – and the most recent evidence is that growth rates are declining in online commerce for developed markets such as North America, Asia and Europe as consumers begin to tire of interruptions and complexity at checkout. While solutions exist – including Visa’s Click To Pay – that will make this situation easier, to date they have not gained much traction.
That said, the news that Visa’s AI-enabled unit has now detected and prevented 25,000 scam merchants world-wide in partnership with banks and law enforcement should be welcomed alongside the billion-dollar saving in fraud costs. But seen in a context where APP fraud alone will cost banks in just three markets — the UK, US and India — billions in losses by the end of next year, it’s clear – as David Capezza, interim Chief Risk Officer at Visa Europe – says, “it’s just the beginning.” The company also announced yesterday that it would be strengthening a core ecosystem protection programs, the Visa Integrity Risk Program, to further support bank clients in their detection of deceptive merchant practices.
Share this
